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Florida Real Estate Investing can be tricky business especially when it comes to the aspect of property management. Experienced owners hire property managers and a good property manager can help to avoid a lot of the mistakes that can be made when managing a property. The following story is all true and one that I personally came across in my real estate property management dealings. This is one of my most interesting “Do it Yourself” property management disasters.

So I guess we all know that marijuana is still illegal in the State of Florida(even though a medical marijuana bill has made it to the Florida November Ballet).  Marijuana is still readily available in the black market; but what is the black market and where does the marijuana come from ? I’m sure that it travels by plane, train, boat and automobile however in this rental property it didn’t have to travel far.  One day I received a call from a property owner who lived in Miami but owned a rental property in a city north of Orlando. He informed me that he had gone behind on mortgage payments for his rental property. The rental property had been his primary residence before moving to Miami a few years prior. He was under-water, meaning, he owed more on the property than it was worth and he said that he just finished evicting the tenants who had not been paying their rent. He had not been up to visit the property as the drive was too long. He informed me that he was ready to list the property for sale to move on with his life.

After receiving the listing paperwork I promptly took a drive to the subject property and when I pulled onto the property (which by the way had been a beautiful 2,000 sq/ft home on 5 acres with a horse stable, pool, shed and more) it was a wreck and trash was everywhere. For safety purposes, since the house appeared to be unsecured, and no one was supposed to be there I called the police. I did not want to walk into a vacant property with no one around for miles to hear me scream if their was someone in the house. So when the police arrived we entered the property and, well, um…. I had never seen anything like it.

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The interior of the property was destroyed. The ceiling was missing, all of the windows were gone, all of the electrical wiring was gone, all of the appliances were gone, half of the drywall was on the floor, hot water heater gone, a/c gone, insulation was everywhere. Then I noticed something strange the walls were covered in a silver sheeting and special commercial duct work was running through the bedrooms, family room and even the garage.

After walking through the property trying to figure out what was going on I looked down to see a big bottle of plant food and it hit me, it had been used as a Marijuana grow house!  I asked the police officer if we could report the vandalism to the property. He went back to his squad car and after a couple calls and some shuffling of paperwork he found out that the house had been raided a couple months prior and the occupants were in jail. The owner of the property had no idea what was going on with his own property. All he knew was that the tenants had stopped paying rent. He had not seen the mess that had become of his once beloved home.

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I looked down to see a big bottle of plant food and it hit me, it had been used as a Marijuana grow house!

Had the owner hired a local property manager to find the tenant, screen the tenant, and inspect the home this would not have happened. When a property manager is doing their job properly the tenant knows that visits to the property can happen at anytime during the year. In the case of someone who has the intention of turning the property into a first class Marijuana grow house there is not enough time to put up and take down all paraphernalia quickly enough with a 24 hour notice to inspect. Therefore, any potentially hazardous tenants will not seek out a property managed by a professional. Scam artists know that they can get away with a lot more dealing with an owner who does not have an intimate knowledge of the law and their rights. The problem is that if everything is not done by the letter of the law the owner can put themselves in a bad position. I had an owner once who got a felony because they managed their own property improperly (story for another blog). Scam artists know how to spot weakness and exploit it.

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To avoid being put in the position where your entire investment is destroyed set up your tenants up the right way.

To avoid being put in the position where your entire investment is destroyed (which can potentially bankrupt most individuals) set up your tenants up the right way. Let them know that you will perform semi-annual or annual inspections and make sure that your lease provides you the right to enter with notice. Our lease gives us the right to enter any of the properties we manage by providing reasonable notice by phone, hand-delivery or posting notice on the property. As a courtesy we do try to schedule inspections with the tenant but at minimum we will provide a 24 hour notice. If they are doing something in your property that would alter it to the point of a grow house there is no way to hide that damage in less than 24 hours.

If you are not satisfied with the maintenance of the property (make sure your lease requires the property to be in a clean and orderly state) your next step would be to provide the tenant with a seven day notice of non-compliance with an opportunity to cure. In this notice you should let the tenant know how they are in violation of their lease and/or Florida Law and you should give them an opportunity to fix the problem and re-inspect on day 8. If you do this and your tenant does not cure the situation you can move forward with the eviction process.

Remember to seek the advice of an attorney when managing a property yourself it might cost you a little up front but could save you a lot over the long term.

And without further ado here are the pictures of the “pot” house:

 

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How about now ?

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Welcome to the grow house

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This is where you can prepare family meals aka the kitchen

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Eat in kitchen nook

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Master Suite

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2nd Bedroom

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3rd Bedroom

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4th Bedroom

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Guest Bathroom

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Master Bathroom

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Well this was the A/C and hot water heater

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